Banks Lead in Keeping Sensex Low

Banks, FMCG firms, refiners and IT companies pulled the benchmark Sensex down by another 43.10 points despite firm Asian cues amid sustained capital inflows and the announcement of monetary policy by the apex bank.

The Bombay Stock Exchange 30-share barometer moved in a range of 15,463.46 and 15,240.53 before ending the day at 15,331.94, a fall of 0.28 per cent over its previous close.

In its quarterly review of monetary policy, the Reserve Bank kept the key rates unchanged and said there are signs of economic recovery but warned that the overall scenario continued to be uncertain with fiscal consolidation posing a challenge.

The RBI retained the economic growth projection at 6 per cent with an upward bias in the current fiscal and expected inflation to scale up to around five per cent by March 2010.

Finance Minister Pranab Mukherjee after trading hours yesterday announced tax breaks including a 1.0 per cent subsidy on the interest charged by commercial banks for home loans up to Rs 10 lakh with a market value not exceeding double that amount.

Realty stocks attracted good buying with its index rising by 4.64 per cent at close on fresh tax breaks for this sector.

Bonanza Portfolio Assistant Vice-President Avinash Gupta said, “The market is expected to consolidate at the current levels. However, the expiry of contracts may add to volatility.”

The National Stock Exchange 50-share Nifty, however, ended slightly down by 8.20 points or 0.18 per cent to 4,564.10 from its last close.

BSE smallcap and BSE midcap counters continued to attract good retail investor buying support and their indices outperformed the Sensex with a rise of 103.07 points or 1.68 per cent and 61.87 points or 1.13 per cent respectively.

Asian indices ended up between 0.09 per cent and 1.84 per cent. Only the Nikkei closed just in the red. European markets were trading slightly weak this afternoon.

Hindustan Unilever tumbled 7.28 per cent on unfavourable first-quarter results announced today. ICICI Bank dropped 2.37 per cent, Grasim 1.77 per cent, SBI 1.70 per cent and RIL 1.46 per cent.

However, Tata Motors spurted by 10.47 per cent due to better-than-expected Q1 results announced during trading hours yesterday. REL Infra rose 3.91 per cent, DLF 3.40 per cent, REL Com 2.98 per cent, Maruti Suzuki 2.84 per cent, Tata Steel 2.54 per cent, Tata Power 2.30 per cent, ACC 2.10 per cent and NTPC 1.33 per cent.

Reflecting rally in second-line counters, the total market breadth remained positive as 1,709 shares ended with gains while 945 finished with losses at the BSE.

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